India is showing a keen interest in developing its mining and mineral sector.

Three recent visits by Indian government officials, the signing of a Memorandum of Understanding with Ontario and the province’s first mining trade mission to India in November were all strong indications that India is making the mining and mineral sector a strategic priority.

“First and foremost, the Government of India recognizes that in order to sustain its economic growth, they have to foster their mining and mineral sectors,” said Indira Singh, executive director with the Ontario Ministry of Northern Development, Mines and Forestry’s (MNDMF) Ontario Mineral Industry Cluster Council.

India produces 89 different minerals and has more than 3,000 operating mines, of which approximately one-third are privately owned. Two-way trade between India and Canada in 2009 amounted to $4 billion, and is forecast to increase to $15 billion in the next five years, according to Pierre Gignac, senior vice-president of Export Development Canada. The annual growth rate of India’s mining industry is predicted to be 5.1 per cent until 2015.

In order to meet the needs of its growing middle class, India’s government has opened up its mining industry to foreign direct investment through the development of a new mineral policy, which will reduce government regulations and promote private sector involvement. Singh said a cabinet committee is currently reviewing the policy before sending it to parliament. It’s expected to be passed by March 2011.

“There are some significant amendments to India’s Mining Act which promote sustainable development and are more investor friendly,” Singh said. In the past, India permitted exploration but not mine development. Now, any junior miner can prospect, stake claims, explore and develop a mine.

The signing of the MOU between the Government of Ontario and the Republic of India’s Ministry of Mines occurred on July 8, 2010. Although India’s mining industry is not as developed as Canada’s, both countries stand to benefit from the accord.

“You cannot be profitable in a global economy if you only serve your home market,” Singh said.

“Canada needs to have a growth-oriented strategy for emerging markets and India offers that.”

India provides business and investment opportunities for Canadian mining suppliers, juniors and investors, as well as a potential market for human resources and potential linkages for research institutions like the Sudbury-based Centre for Excellence in Mining Innovation (CEMI). The country also employs more than two million people in its well-developed diamond cutting and polishing industry.

India can benefit from Ontario’s exploration and mining expertise, as well as its training and skills development know-how.

“We have a number of institutions (in Ontario) that provide training,” Singh said. “We are looking at exchange programs for students, professors and researchers with local educational institutions.”

A joint-working group was established and met in September and November during the India mining mission to work out logistics and identify areas that require capacity building. David O’Toole, MNDMF’s recently appointed deputy minister, chairs the new committee. He was also one of several Canadian delegates representing Ontario’s interest during the trade mission to India.

Trade mission

The trade mission to Kolkata from November 9th to the 13th, encompassed two back-to-back events: the International Mining & Machinery Exhibition (IMME), a bi-annual show organized by the Confederation of Indian Industries in association with India’s Ministry of Mines, and the Global Mining Summit, organized by the Confederation of Indian Industry in co-operation with the Ministry of Mines.

The Ontario trade mission was sponsored by the Ontario Chamber of Commerce in partnership with MNDMF and the Ministry of Economic Development and Trade. |

The IMME welcomed 360 exhibitors, of which 65 per cent were from outside of India. Approximately 15,000 visitors attended, including major Indian buyers of equipment and services as well as those
interested in collaborating with international companies.

Eight Canadian companies attended and participated in individual meetings with approximately eight to 10 companies each. Ontario hosted an invitation-only reception for bankers, pension fund managers and other Indian business people interested in investment opportunities in Ontario.

An Indian delegation visited Sudbury on October 27 seeking foreign investment and information about Canada’s mining and mineral industry.

The 20-person team toured CVRD Inco’s Copper Cliff North and Stobie Mines and MIRARCO’s Virtual Reality Lab. An evening reception allowed for presentations and networking with government and mining industry officials and a group of mining supply and service company representatives.

During the last few years, India’s gross domestic product has been growing at a rapid rate of eight per cent and the country is widely viewed as an emerging global player. Power and mining are two key sectors, according to a November 2006 report by the Canada India Business Council.

India is a major consumer of gold, iron ore, coal, limestone and zinc and the eighth largest producer of iron ore.

There is a strong Australian presence in the country and multinationals such as BHP Billiton and Rio Tinto are exploring for minerals.

Michael Winship, CVRD Inco’s vice president of mines and mill, Ontario Operations, puts India in the same league as China, Russia and Brazil, all of which are industrializing at a rapid rate and driving the demand for commodities.

The Government of India’s Secretary of Mines, A.K.D. Jadhav, said India would like to foster and consolidate a relationship between the two countries.

Amendments to the Mines and Minerals Development and Regulation Act of 1957 are expected to be passed in Parliament by April 2007 and to attract

domestic and foreign investment.

Ravi Kastia, president and business head of the Aditya Birla Group, a mining advisory organization, said a committee of 23 stakeholders has been working on the policy changes necessary to spur growth in the industry.

R.K. Sharma, secretary general of the Federation of Indian Mineral Industries, described Indian mining as inward looking prior to revisions made to the National Mineral Policy in the ’90s. The foreign direct investment limit was 40 per cent, the nationalization of the country’s coal mines in the early ’70s stunted foreign investment and high tariffs protected local industry from foreign competition.

Restrictions on foreign direct investment have been eliminated for all minerals, including diamonds and precious stones. In the 2006 budget, tariffs were reduced on ore, concentrate and many mineral products.

Sharma said India mines a number of minerals, but is short of gold, lead, zinc, copper and nickel. The country is looking to Canada, the world’s finance capital for mining, to invest in exploration and development.

“We also know that we have diamonds,” he said. “We want to use technology from Canada to be self-sufficient as soon as possible.”

India’s domestic supply and equipment sector needs to be developed in combination with the development of human resources, he added.

Kastia said prospecting and mining skills in Canada are much more advanced than in India.

“We want to learn about Canada’s mining sector, your technology, and how government and the private sector work together to create strategies for successful mining practices.”

Risk capital and the Toronto Stock Exchange were of interest to the delegation. “We are inspired by the Canadian model where you have juniors and prospectors who are independents that stand alone . an industry in their own right.”

Indira Singh, executive director of the Ministry of Northern Development and Mines’ Ontario Mineral Industry Cluster Council, said Ontario has anopportunity to be proactive and take the lead in developing a business relationship